Change Management

October 26, 2009

Some exciting news we’ve been incubating in the past couple of
months – we went live with our brand new website a while ago and we got a brand
new blog to go along with it!Well, not
really new as we’re still the cross-functional, entrepreneurial, bottom-line oriented, and strategic
minded folk you know and love.But we’re
at a new address and we have our two newest Associates, Marko “CroCop” Nikolic
and Kurt “Dirty Jerze” Kaufer as the writers.As our company celebrates our four year anniversary, we thought it’d be
great to have the perspective of these new additions.

Determining the connection between the external and the
internal. This is the art of business acumen: link an insightful
assessment of the external business landscape with the keen awareness of how
money can be made – and then executing the strategy to deliver the desired
results. The building blocks are simple but mastering how they intertwine
in each setting demands intense mental activity and skill.

20/20 Foresight –
External Context

Identifying the external context requires a quick, decisive
mental modeling of the big picture. This skill takes plenty of
practice. The essence of this skill is to find patterns, rhythms, from
among a wide variety of factors and posit the assumptions that would converge
them. A simple way is to begin with a list of six questions:

What is happening in the world today?

What does it mean for others?

What does it mean for us?

What would have to happen first (for the results
we want to occur)?

What do we have to do to play a role?

What do we do next?

The answer doesn’t exist in these answers. The questions
merely help executives assess the validity of the company’s moneymaking
approach. This is a fluid process, and almost entirely qualitative.
Assuming this iterative routine encourages executives to transcend old rules of
thumb deeply etched in their DNA – i.e. quantitative data, deliverables – and
means giving up on the habitual reliance on precedent historical data.
Historical data reflects linear change, rather than continuous movement which
is the essence of business maneuvers. One big trend is achieved through a
million small ones.

Learning to see the business landscape with 20/20
observation depends on the rigor and discipline applied to the entire process
of a) envisioning the changes b) deducing the actions and c) implementing the
plan.

20/20 Insight –
Internal Context

The ability to simplify complexity is vital to the success
and sanity of business leaders. We live in a world with unlimited data,
unlimited thoughts, and constricted time. The line between the successful
and sane strategists vs unsuccessful and stressed out strategists comes in the
ability to focus on the basics of moneymaking of a company. Successful
marketing strategists know how to break the most complex business situations
down to the fundamentals.

Here are the basics:

Cash – this is a no brainer.Understanding how much cash the business
generates and how much cash it consumes is critical.

Margin -margin is tricky.Typically, when
a client mentions margin or bottom line, what they are referring to is the net
profit margin – the money the company earns after paying all expenses, interest
and taxes.Gross margin is a different
story if not more insightful of shifts in the business.Gross margin is the different between a
product’s selling price and the cost to make the product (i.e. “cost of goods”)
which is expressed as a percent of the selling price.How changes outside or inside you business affect
gross margin is key.This could signify
changes that need to be made in either the supply chain, value chain or
both.

Velocity – velocity refers to the speed that
revenue turns over for each dollar of inventory.For instance, if you have$10 million in inventory for the year and
revenues of $20 million, then your inventory velocity is 2.This describes how fast you’re moving raw materials
to production to getting them on the shelf for customers.For B2B companies like ourselves, you can
track velocity by how much revenue is generated per hour of human capital.

Return on assets (ROA) – margin multiplied by velocity
equals return on assets.This is
probably one of the best indicators of a healthy business.Think of this as top of the list in a
diagnostic exam.If your return is lower
than cost of capital, your business is in no-man’s land.Increasing your return on assets can be done
using the math – increase velocity and/or increase margin.

Growth – there is a distinction between good
growth and bad growth.Bad growth
happens when your revenues go up while eroding ROA, customer equity – the
health indicators of a business.Good
growth typically happens organically, where the integrity of the ROA and
customer equity are increased through diligence in consistently iterating the
business model and its building blocks.The Net Promoter Score is a great performance metric in this game of
good growth.

A full perspective is necessary to unclog bottlenecks in our
thought process.As a complete marketing
strategist, you must have 20/20 foresight into the external context and 20/20
insight into the internal operating of the business, whether your own or your
clients.

Next, I will speak on what is step where most miss
the leap to becoming a complete marketing strategist – Functions Knowledge.

May 29, 2009

The big picture.Many
take this into consideration when talking about business – you often overhear
consultants or marketing professionals urge their team/boss/client to “take a
step back and look at the big picture” but rarely do people take the big
picture into consideration in professional development.Big mistake!Without seeing the big picture in your development (as a marketing
strategist) or inyour talent pool (as
an employer developing top marketing personnel), you are severely limiting your
work capacity, work capabilities, and ability to discover your best work
potential.Perhaps more insidious is
that you will lessen your leadership impact and decrease your company’s chances
to achieve the big picture that you urged them to see in the first place!

The foundation of the eBC Pyramid is Business Acumen.Understand what key drivers that make up your
business model.Many people mistake this
for a template business plan and spend hundreds of thousands of dollars on an
MBA education without ever learning how to put the pieces of the puzzle
together in a simple language.Essentially,
the business model comes from answering two questions: 1) What customer need is
being met? 2) How does your company make
money?As a complete marketing
strategist, you can’t perform to your accountabilities if there are deficient
components in the business that must be brought up first.Developing a keen business acumen will allow
you to set the proper expectations for your company.

Functions Knowledge – The biggest deficiency in talent
development exists here.Have you ever
witnessed a meeting between the CFO, CMO, COO, CTO, C(insert letter here)O?It’s akin to putting a Brazilian who
only speaks Portuguese, a Chinese person who only speaks Chinese, a French
person who only speaks French, and an Aussie who only speaks rugby, alone in
the same room.Communication is limited
to awkward body language, makeshift sign language, and ineffective gesturing
that can only be described as “pointing-to-things”.Hijinks ensue.Good for a sitcom, sure.Good for business, not so much.To be a complete marketing strategist, you
must become fluent in the functional languages. This requires an understanding of the key
metrics that the functional lines are evaluated on and also an empathy for the accountabilities
and responsibilities of the functional heads (CFO, COO, CTO, et al).A
complete marketing strategist is a change agent and change starts with proper
communication.

Marketing Fundamentals – When someone asks me what they
should be reading, I reply with Principles
of Marketing by Dr. Philip Kotler.This is my honest answer and when it comes to the moment of facing the reality
that this is a textbook that exceeds 1000 pages, most people (99% of the people
who asked me this question, I’d estimate) reply with “Can you recommend
something I can pick up at Borders?” I
typically don’t even bother offering this recommendation anymore because most
want a short, enjoyable book that they can read over a weekend.But a short, enjoyable book isn't what they need. Sure, the book was written before I was born,
but it’s timeless in the sense that fundamentals are timeless.In basketball, the fundamentals of dribbling –
head up, weight balanced over hips, ball on fingertips – haven’t changed from
Cousy to Lebron.In marketing, the
fundamentals – segmentation, targeting, positioning – haven’t either from
Kotler to Mikailian.Learn them properly so
you can maximize the next level.

Marketing Strategy – I haven’t run into any studies on this
but I’d surmise that the best marketing strategists would be exceptional chess
players.Not saying that you have to
become the Bobby Fischer of marketing (thereby making you eccentric and unattractive
to 90% of the opposite sex) but marketing strategy is a complete chess
match.On the other end of the table
sits your competition’s marketing strategist.Be too reliant on one move and you become too predictable.Be too risk-averse or risk-favorable and you may
open your competitors to taking you out with an early attack or waiting you out
and taking your market when you have no more ponds.I LOVE THIS GAME!

There are ebbs and flows to every strategic
reality.Though a paper deliverable is a
good start, more often than not, you’ll have to remain agile to adapt to the
fluidity of the match.There are
short-run moves (ex: promotions) and long-run moves (ex: advertising).Understanding
the business engine, functional strategies and proper marketing fundamentals
allows you to be creative and put it all together.Putting
it together to get your result (i.e. dominate the competition by capturing the
affection of the customers with minimal loss to your own company) is the game you
have to love to truly “get” strategy.Did I mention I freakin' LOVE this game? Can I get next?

Tactics – I won’t belabor this for now.Facebook, Twitter, email marketing, SEO,
PPC.These exist here as do most
purported "marketing strategists/consultants" who we appreciate, but really, they are "marketing specialists".Please don’t
get me wrong!We are addicted to new
trends and new technologies.New trends
and new technologies give us more options to choose from, more players to play
with, when executing marketing strategy for the business/client we're serving.After all, the customers are driving these
trends and technologies and you’ll need to pay close attention to the pulse of
your environment.But it’s a full understanding the
why and how of these tactics that transform a "marketing specialist" to a "complete
marketing strategist".

The pyramid above displays the basic building blocks that we
use to make a complete marketing leader.That is, someone who is strategic, cross-functional, intelligent and
creative.Whomever comes to our company,
we assess them on how rigorously they’ve attacked the fundamentals and how
aggressively do they continue to work at the fundamentals.If you’re weak on one of these levels, the
pyramid falls apart.Nowadays, the space
is ripe with one-trick ponies.And there
are plenty of people with great tactical skill but if they don’t know how to
apply those tactics to the big picture, then what good are they?

But most people, particularly those of the Gen Y clan, don’t
want to deal with that.They’re looking
for instant gratification, the shortest route to promotion, to that next title.Perhaps they don’t learn segmentation
practices because they don’t like analytical work. Perhaps they don’t develop proper
communication with Operations or Finance because they rely on communicating
with marketing peers with similar communication skills.Perhaps this is you?Sure, you can get away with it for a while but
the deficiencies will catch up with you sooner or later.

It’s like they’re so focused on composing a masterpiece that
they never master the scales.And you
can’t do one without the other.The
minute you get away from fundamentals – whether its proper preparation,
thought-processes, or work ethic – the bottom falls out easily.

When I was at Whole Foods Market, everyone said I was being
held back.But I was taught the scales
there.I was taught the importance of fundamentals and how to apply them to individual cases and my own propensity to
be creative.The concept of being a
complete leader was heavily stressed and imposed.When I got to eBoost Consulting and applied
my learning to include new digital tools, I had a strong foundation to work
from.I knew the way to approach
learning and I developed a feel for what would be flashes-in-the-pan or solid
tools.It allows me to be decisive.It allows me to save time.

When you understand the building blocks, you begin to see
how the entire operation works.You know
what tools to use, which frameworks will click to bring out the best in your
team.

People are often surprised that I spend so much time on the
whiteboard in meetings when we made our name on being cutting-edge.They ask if we knew which frameworks, which
tools we were using.My answer is always
no.Tools change. But the fundamentals remain the same.I assess the distinct abilities and
personality traits of the personnel in the room because I am always confident
in my understanding of fundamentals and my ability to apply the fundamentals to
any canvas.Give me a $10,000 brainstorming
software or give me the back of the napkin.The results will be the same.

It comes down to a very simple saying: there is a right way
and a wrong way to do things.Peter
Drucker once noted that effectiveness comes before efficiency.Not the other way around.Get the fundamentals down to be effective and
then your level of efficiency and probability for success will raise.

More to come on The eBC Pyramid tomorrow.

-johnny

The above excerpt is adapted from the chapter “Fundamentals” from I Can’t Accept Not Trying: Michael Jordan
on the Pursuit of Excellence.

April 20, 2009

Much like love, the marketing strategist's mind can also be a battlefield.

So you've been marketing in a recession. You made the necessary adjustments in your marketing mix, shed unprofitable customers and focused in on your most revenue-now marketing initiatives. This series of posts will describe the way that you can take steps today to ensure that your business performs well on the upswing.

Step 1: Get your mind right.

As we've noted before, thoughts turn into actions. So to get results as a strategists on the flip side of the recession, then your mind has to be reprogrammed. Needless to say, step 1 in allocating marketing resources after the recession is to get your mind right.

This is a mental minefield that consumers are prone to and you may be aware of.

But what marketing strategists often fail to consider is that they way they strategize may have adjusted as well. For instance, if your CEO has been urging you to only spend on short-term performance initiatives for the past year, then it may have changed your philosophy more than you realize.

This is a real phenomena, folks, and if you intend on making the right maneuvers now to capitalize on competitor weaknesses, then there are three types of mental minefields you need to be aware of.

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1. The Mindfulness Trap - Even if you were to draft a sensational, well-balanced marketing strategy, there will be times when (a) the boat is rocked and you'll have to make adjustments and/or (b) your CEO is mandating that you need to cut back to initiatives that "only perform" (i.e. short run marketing). The tendency to be pulled into a short-term perspective by the pressure of daily activities. This scenario is very likely and you'll have to be mindful of where your actions are germinated from.

2. The Cognitive Trap - Under duress, most marketing strategists will make the assumption that short-run marketing initiatives and long-run marketing initiatives exist in an either-or world. That is, if you run branding, then you can't run PPC. Nonsense! Nothing exists in a vacuum, and budget is a large component of marketing, you can have your cake and eat it too. This is where principles such as hedging marketing bets come into play.

3. The Self-Knowledge Trap - Henry Mintzberg, a pioneering management scholar, once demonstrated that managers often see themselves as strategic visionaries, though in practice they spend a remarkably small proportion of their time on anything strategic. Instead, they focused more on transactional activities. The trap here is that there is a disparity between what marketing strategists think and what they actually do. This isn't to say that you shouldn't be executing on tasks, but if you think tactically more so than strategically, then you may have a problem. This trap is perhaps the one we encounter the most during our Executive Education courses.

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What I encourage you to do today is a self-audit on which trap(s) you are most prone to. Increased self-awareness inevitably leads to improved leadership.

February 18, 2009

The correlations between sports and business are uncanny...and oftentimes trite. However, I will take a "shot" (hehe - that was a clever reference to basketball) at this anyway.

What makes Chris Paul so great? Is it his competitiveness? His unwavering trust in his teammates? His smooth, radiant skin? While it's safe to say "yes" to all three, what ranks right there at the top of that list has to be his sense of court awareness! Chris Paul knows where everyone is going to be on the court, both on his team (which is why he leads the league in assists) and the opposing team (which is why he leads the league in steals).

How aware are you of your business? Assessing the external business landscape and looking internally is a competitive "must do". The good news is, you can bet that a majority of your competitors aren't do this, and if you are, then you've established a competitive edge.

So for your 5-minute homework today, ask yourself the following questions. Yep, they're the old Jack Welch strategic questions, and they work.

What does your competitive environment look like?

In the last three years, what have your competitors done?

in the same period, what have you done to them?

How might they attack you in the future? i.e. What moves can they make to scare living pulp out of you?

What are your plans to leapfrog over them?

Your challenge is find which questions you don't know the answer to, and decide on a set of specific actions to get aware!

September 23, 2008

I know a lot of people have been hating on Microsoft's new marketing campaign but I love it because it's such a subliminal campaign. The beauty is in the nuances. And in typical eBoost Consulting fashion, I will explain why in 3 main points:

"I am a PC" is brandable AND it's written to be repeated in the first-person. Never underestimate the power of a short, repeatable slogan. "I am a PC" is simple and anyone, from 5 to 50 can repeat it without fail. Also, I'm convinced that the first-person reference is subliminal messaging at its pure form. Remember that it's an uphill climb for Microsoft. It has to start somewhere and over these next few years as they seek to change culture (and let's not forget, it is about changing culture), then first-person references should how relatable the brand is.

Pairing Jerry Seinfeld and Bill Gates is genius. Great pairing. Clearly, others disagree but again, it's about changing a culture over the next few years. How better to make a statement then pairing the most unrelatable celebrity of the world with one of its most relatable? Seinfeld has significant pull; he's the everyman and he made a living out of finding hilarity out of the most mundane situations. I love this.

To those who think that this commercial series was/is a bomb, I'm not one to disagree. However, I do posit that the first Microsoft ad of this campaign would have been hated on anyway since most of the blogosphere's top influentials are Apple diehards. You could have gotten the top stars of today on the first big commercial and they'd be under even more scrutiny. Notice that most of the conversation out there is making fun of Bill Gates, NOT Jerry Seinfeld. This wouldn't have been the case with other celebrities who don't hold the same everyman credibility as Seinfeld does. This is as good as a first big commercial could be and though they pulled it, I don't think it wasn't by design. Gates took the first trashing for the team, leaving the next commercial ad to go nowhere but up. It's like being on the frontline.

Mixing culture-changing celebrities with the every day person is awesome. While the Seinfeld/Gates pairing is the big bang, what is subtly but effectively executed is the interactive marketing end (for instance, the homepage). By mixing in videos of everyday people saying, "I am a PC" while weaving culture-changing celebrities such as Pharrell into the mix is a great way of saying that the PC is universally applicable. Also, I think the celebrity selections were by design. Pharrell, Rashad Evans, et al, are all fringe celebs who do things that change culture. These aren't your Bonos of the world, nor would the Bonos of the world work in this campaign. They are the fringe and they use PCs. Add that with the vintage Bogusky Mojave experiment and you have a well-rounded starting point.

This is an outstanding starting point for Microsoft. Changing worldviews is difficult especially for a brand like Microsoft. I love watching how Microsoft is attempting to change culture and for all intent and purposes, this is an EXCELLENT starting point.

Can't wait to see what comes next.

-johnny

P.S.- this blog post is dedicated to Matt Byers who stumbled upon BoostStrapping and proceeded to read two years worth of posts in one day. Matt, you wanted more...you got it!

September 08, 2008

I'm a little slow on the uptake here, but I was just informed that Michael Hammer passed away last Wednesday. He was 60.

Michael Hammer may be unfamiliar to most (and if you did know of him prior to reading this, then please send your resume to jen@eboostconsulting.com) but his influence holds a monumental place in business. He is considered by many to be the forefather of Business Process Reengineering (BPR) which was tremendously popular in the 1990s and is thoroughly significant in today's business climate which is filled with M&A.

Hammer's 1993 book, "Reengineering the Corporation: A Manifesto for Business Revolution" was one of the first business books I ever read. Admittedly, it was wayyyyyyyyyyy over my head, and only when I had to learn Six Sigma and TQM processes did I crack open that book again - this time with a full appreciation of Hammer's insight. Hammer drafted a few more books since then but nothing really matched the influence of that seminal book.

I'll close this post with a link to Hammer's management consulting firm and I urge you to take a closer look at the contribution of Michael Hammer.